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On UN's N. Korea Audit's 2nd Day, Rosy Tales from UNFPA, Red Faces at UNDP

Byline: Matthew Russell Lee of Inner City Press at the UN

UNITED NATIONS, March 20 -- With the delayed "urgent audit" of North Korea programs called for by Ban Ki-moon on January 19 now in its second day, inconsistencies are cropping up. The 90-day deadline for the audit is now described as merely being a goal. The government of the Democratic People's Republic of Korea has yet to signal that any auditors will even be allowed to enter the country. While the delay in starting the audit is attributed to "unforeseen staff travel arrangements of one of the auditors," UN insiders say that it was the Pyongyang to New York travel of Resident Coordinator Timo Pakkala that was delayed for one week, so that certain surgical modifications to the records could be made. A point at issue now is not only how much money was expended, but where in fact it went.

            On Tuesday, the audit's second day, officials from the UN Population Fund put in an appearance at the UN Board of Auditors' office on the 26th floor of the UNDP building, where they claimed that UNFPA's programs in Pyongyang did not have the problems which forced UNDP to suspend its operations earlier this month.

            This is belied by a draft internal audit report obtained by Inner City Press, and presumably available to the Board of Auditors. If it is not, since in the face of this audit documents have a way of disappearing or being modified, extensive quotes from the UNFPA internal audit are below.

     But first, after receiving no-comment from the Board of Auditors, Inner City Press' previous questions about the audit have been responded to by UN Controller Warren Sach:

Subj: Question on audit, from today's noon briefing: why was audit pushed back a week, etc, thanks 

From: Warren Sach

To: Inner City Press

CC: goolsarrans [at]

Date: 3/19/2007 2:14:37 PM Eastern Standard Time

   1. Why was the audit pushed back a week? As per a 7 March 2007memorandum from the Board of Auditors, the planned start date of the audit will be delayed by one week due to unforeseen staff travel arrangements of one of the auditors.

   2. What impact might it have on complying with the 90 day time frame?

   Please see below answer on the proposed time frame.

   3. When does the 90 day time frame expire?  The Secretary General has requested through the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the Board of Auditors conduct the required activities within a time frame of 90 days.  The Board of Auditors has agreed to take up the work as a matter of priority which we hope can be achieved within the timeframe requested by the Secretary General.

   4. Has any request been made for auditors to enter DPRK?  The Secretary General has sent a letter to the Permanent Representative of the Democratic People’s Republic of North Korea informing them of the audit and requesting assistance to facilitate travel arrangements and visas.

   5. Has there been any response? The letter to the DPRK was sent on the 12th of March 2007. We have not received any follow up communication in the past few days.

   6. Has there been any response to Ban Ki-moon's February 28 letter on this issue?  The letter from the Secretary General dated 28 February 2007 was a response to a correspondence received from the Permanent Representative of DPRK.  We have not received any follow up communication from the DPRK.

            While appreciating this reply from Warren Sach, who has also taken back on but has yet to respond about the post of Ban Ki-moon's representative to the UN Pension Fund, it is still unclear when the audit's 90 day "clock," previously referred to by Ban Ki-moon's staff, expires. Additionally, there is among insiders a counter-explanation of the audit's one-week delay in starting, that involves the Pyongyang to New York travel of Resident Coordinator Timo Pakkala being delayed for one week, so that targeted chances to documentation could be made. More on this to follow. Within UNDP, there is growing paranoia. The Administrator's discomfort is, insiders say, incarnated in a skin condition used to deny press access. No questions!  And no answers, either, for example as to why the head of UNDP's Bureau of Management Akiko Yuge has left New York for precisely the two weeks of the audit's first (and some say only) phase.

            For now, the members of the Board of Auditors are making phone calls and holding meetings. On Tuesday, they went to UNFPA, where they were told a number of stories, including that UNFPA's programs in Pyongyang did not have the problems which triggered the audit and forced UNDP to suspend its operations in North Korea.

UNFPA's Thoraya Obaid: UN interview, not (yet) audit

            UNFPA's story is contradicted by a document obtained by Inner City Press, an internal audit report of UNFPA's County Office in DPR Korea, dated May 2006.

            This internal audit was carried out by KPMG in-country from May 23 to May 29 and is 68 pages in length. Even while sidestepping UNFPA's provision of hard currency to the Kim Jong Il government -- perhaps because all of UNFPA's payments were and are through UNDP, as more recently acknowledged by UNDP's spokesman -- the audit paints a disturbing picture of UNFPA.

            At UNFPA in North Korea there is sloppy bookkeeping, at least, for payments of $96,000 and $93,000 and $77,000. KPMG diplomatically notes an "absence of documentation for independent verification." There was a murky "transfer of assets" worth $420,000 to the North Korean government. A consultant was hired to slap together some praise of UNFPA's and the DPRK's "partnership," but was paid before the work was done, and the work was never evaluated. In a project from the European Commission, KPMG notes "unauthorized use of project resources," without saying by whom. But this is what the Board of Auditors should find out and make public.

   Back in January, Inner City Press asked UNFPA for comment on these issues. Spokesman Abubakar Dungus on January 22 said he would respond that day. He did not, and has not. On January 26, Mr. Dungus' boss Safiye Cagar told Inner City Press that Mr. Dungus was on retreat.  Minutes later, UNFPA security chief Janie McCusker attempted to have Inner City Press' correspondent barred from the UNFPA Executive Board meeting. When this failed, Ms. McCusker was seen whispering with Ms. Cagar, Kwabena Osei-Danquah and UNFPA Executive Director Thoraya Obaid. Missing from this scene was UNFPA's Alaadin Morsy, who has been threatened by Ms. Obaid with a document, contested by Mr. Morsy, concerning

"the vehicle that you imported when you were first place on the ATR Project in Egypt... the vehicle was imported for your personal use without paying customs duties to the Government of Egypt.  If you were employed for less than three years on the project, you were obligated to either re-export the vehicle or pay the customs duty that would have been owed when you imported the car in 2002. Your employment with the project was terminated after one year and you should have taken one of these two action. To the best of our knowledge and that of the Ministry of Foreign Trade and Industry and the Egyptian Customs Authority, you have not done so. Mr. Tim S. Buehrer of the Secretary-General's office has stated that he has contacted you on numerous occasions concerning this matter but that you have not responded."

            Some have predicted the ejection from the UN System of either Mr. Morsy or Ms. Obaid. These are other issues, beyond but not unrelated to hard currency and mis-management, into which the Board of Auditors should delve, along with these additional findings from UNFPA's May 2006 internal audit, for example on the key question of accepting personnel from the DPRK government:

"National staff were seconded from the Ministry of Foreign Affairs for National Program Officer, Finance and Administration Associate and Secretary positions and the driver was seconded from the General Bureau for Affairs with Diplomatic Missions... There was no documentation on the health status and evidence of educational background in addition to the Curriculum Vitae for seconded staff maintained in the staff personal file... Competencies of personnel not verified prior to secondment acceptance."

        These are precisely the issues on which Ban Ki-moon called for the audit. UNFPA now tells the Board of Auditors that everything's fine. How? There is also this, in the internal audit of UNFPA:

"World Health Organization (WHO) was the implementing UN agency for DRK3R203. An Annual Work Plan was developed and signed on 1 February 2005. The following issues were note in the execution arrangement with WHO:

The budget allocated for WHO execution was US$193,500 for 2005. However, in the AWP, an amount of US$47,000 was manually recorded as balance carried forward from 2004 in addition to the allocation in 2005. The amount was inconsistent with WHO financial report claiming that the amount carried forward from UNFPA from 2004 was US$62,452; Our review of the financial report submitted by WHO revealed that an amount of US$156,388 out of total budget of US$255,952 was still in 'unliquidated/earmarking' column indicating that the plan activities (mainly fellowships) for the year have not taken place. As at our audit date, the Office was not able to confirm whether WHO has successfully completed the outstanding activities as at 31 December 2005. The information on the utilization of the unliquidated amount was only provided to the Office after being requested the audit team. Ineffective monitoring of resources. Error in financial reporting."

            In response to a direct question from Inner City Press of whether the World Health Organization received $10 million from South Korea while Ban Ki-moon was foreign minister, WHO spokeswoman Christine McNab replied that, "Yes, last year South Korea committed to providing the equivalent of US 10 million per year as support to DPRK through WHO for health-related humanitarian assistance, for three years." This has given rise to a question of how much money the South Korean government transferred to North Korea, through UN agencies, while Ban Ki-moon was South Korean Foreign Minister, click here for that story.

            In the "Management comments" of the audit, UNFPA claims that it "is doing good comparing with other UN agencies resident in DPRK." The auditor KPMG -- also the auditor of UNDP in North Korea -- does not reply. Then again, since UNFPA has refused to show these audits even to the member states on its Executive Board, perhaps there's no reason for KPMG to reply. Reply to whom? Only now, there is an answer -- to the Board of Auditors, unless all of these documents and drafts disappear.

   On UNDP and bank accounts, the UNFPA internal audit says

"The monitoring and oversight of UNFPA funds in UNDP’s bank account in the Korea Foreign Trade Bank was performed by UNDP. The Office had no involvement in the management of banking accounts and facilities in 2005. However, according to the UNFPA Internal Control Framework, which came into effect on 22 March 2006, Country Offices are to receive and check completed bank reconciliations from UNDP on a monthly basis.... Lack of oversight on bank reconciliations."

            After dodging the question from the time it was raised to Kemal Dervis on February 1, UNDP's spokesman recently stated that upwards of $10 from "other UN funds and programs," the "vast majority of it" from UNFPA, was paid through UNDP. UNDP has not disclosed information which its spokesman, in the hallway outside the briefing room, promised to provide, about safeguards in place to track this UNFPA and "other" money. Rather, UNDP has said, "Wait for the audit."

            But if from Day Two of the audit, UNFPA does not tell the truth, and the auditors may never go to North Korea, how will the truth be found? Developing.

    Again, because a number of Inner City Press' UN sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of the UN agencies and many of their staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

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With Audit Starting in NY, UNDP Manager Akiko Yuge Leaves Town, Sale-of-Jobs Unanswered

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, March 19 -- As the delayed "urgent audit" of North Korea programs called for by Ban Ki-moon on January 19 today begins at the UN Development Program, the director of UNDP's Bureau of Management Akiko Yuge has conveniently left town, internal UNDP e-mails obtained by Inner City Press show.

            Sources say that UNDP's legal chief James Provenzano and finance director Darshak Shah may also have left. (Since UNDP no longer answers even basic questions, this cannot be confirmed. As to Ms. Yuge, see the intra-UNDP email below.)

          Mr. Shah and Ms. Yuge were among the eight UNDP officials to whom the Executive Secretary of the UN Board of Auditors, Swatantra Goolsarran, sent his March 1 memo scoping out the audit including requested interviews, their absence from headquarters during the audit has raised questions about staff. So has the fact that the scope of audit memo was not sent to UNDP's Asia chief, Hafiz Pasha, but only to his ostensible deputy, David Lockwood. The credibility of the audit is increasingly doubted by knowledgeable sources inside UNDP.

            UNDP's large but recently lethargic (at least on this issue) communications office has not helped dispel the doubts. A series of questions about the audit and UNDP's North Korea program have done unanswered. Even two non-North Korea questions asked on camera then in writing last week, regarding UNDP's reported support of a gold mine in Romania and the selling of jobs and promotions alleged by UNDP staffers, have been entirely ignored.  UNDP's David Morrison was asked these questions at the March 13 noon briefing filmed by UN TV, click here for video, from minute 40:30 to 42:39.

  Inner City Press followed this up with an email:

Subj: Follow-up to today's UN noon briefing, & some long-outstanding questions, thanks 

Date: 3/13/2007 2:05:40 PM Eastern Standard Time

To: david.morrison [at], ad.melkert [at], kemal.dervis [at]

CC: [cc's deleted in this format]

 From: Inner City Press

Hello -- This follows up on questions asked at today's UN noon briefing. On  deadline,  need a yes or no answer on whether the previous head of the Department  of  Management ever imposed conditions appointments or promotion (or in  cases of demotion / re-classification downward). We are told that this was  sometimes explained as being akin to a "headhunter's fee."

  Because we are on deadline, we are also cc-ing some of the  individuals, who we have been told may on this question have knowledge. [Ed.'s note: cc's deleted in this format.]

I am attaching for your comment and explanation three documents  concerning the controversy regarding UNDP's position on, and involvement in, gold mining project in Romania.  Also, a breakdown of the $10.88 million  you cited today, and your response to Ben's question about the $151 million  figure in OCHA's consolidated appeal. I am pasting below yesterday's reminder email, and note that a  long-ago asked question -- how many people work for UNDP? --  message, which  included other still-unanswered questions, pasted below -- has yet to be  answered. Ad Melkert is cc-ed because he indicated such answers would  become faster.

 And again, we believe that Mr. Dervis as Administrator should come  and give a briefing in 226, given the issues that have been raised. 

  Still, no response whatsoever. Therefore, for now, here is an edited version of one of the UNDP staff complaints that has been directed to Inner City Press, despite David Morrison's counter-story that procedures and whistle-blower protections exist in UNDP such that no one should go to the press:

Subject: Re: Attn: Mr. Matthew Russell Lee
Date: 3/2007 [Date and time omitted due to last line of 2d email, below]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press

 ...on jobs for favors first. I know some people to whom Brian Gleeson offered promotions or appointments in exchange of the cash equivalent of the first salary. He mentioned this option to me as well when my post was re-classified downwards. I pretended it was a joke, but afterwards the relations became very strained. For quite some time I was kind of sidelined...

   Then --

Subject: Re: Attn: Mr. Matthew Russell Lee - many thanks, some [follow-up] questions
Date: 3/2007 [Date and time omitted due to last line of this email]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press

...Usually $10,000 or first salary. Brian was quoted to say that as UNDP was becoming corporate-like, it would be normal to charge as head hunter agency would charge.

...Our I.T. manager said that the management could track what we do on the Internet at any instant. So much for our rights, which could be another topic for you to explore.

  Yes, that will be another topic. And on the Romania gold mine controversy, we have tried another route, which we hope will soon bear fruit, at least a response of some sort. But why would UNDP made no response at all for six days to questions about these sale of jobs and promotions allegations, questions raised in a formal UN-televised press briefing and then also in writing, with additional names provided?

  This was sent out, Friday after close of business:

From: Bernadette Jones

Sent: Mar 16, 2007 18:10

Subject: O-I-C of BOM

Dear All,

This is to advise that Ms. Akiko Yuge will be away from Headquarters from 18 to 31 March 2007, inclusive.   During her absence Ms. Jocelline Bazile-Finley will be the Officer-in-Charge of the Bureau of Management. Please also note that Ms. Bazile-Finley is the Acting Chief Procurement Officer for this period.

Thank you

Bernadette Jones , Executive Assistant to the Assistant Administrator and Director, Bureau of Management

            We will have more about UNDP's procurement. But why would UNDP send its new director of Management, Brian Gleeson's successor, away from headquarters precisely during the two week New York period of the "urgent audit" of UNDP's management of its North Korea program? Questions, questions...

At UNDP, Audit Delayed and Questions Deflected As Other Scandals Brew

Byline: Matthew Russell Lee of Inner City Press at the UN: New Analysis

UNITED NATIONS, March 13 -- The urgent audit of the UN Development Program called for by Ban Ki-moon on January 19 has been postponed for another week. UNDP spokesman David Morrison on Tuesday took questions on camera, and stated that UNDP has expended $47.5 million in North Korea in the past decade, $10.88 million of which was on behalf of other UN agencies, "the vast majority" being for the UN Population Fund. Asked about the $151 million UN Consolidated Appeal for the country issued in 2004, Morrison said he was not aware of the appeal and would get back to reporters with answers about it. Ten hours later, the answers had been provided to this or several other follow-up questions posed by Inner City Press.

            Morrison largely deflected questions by referring to the now-postponed audit, and saying he can't or won't answer until the audit is completed. Video here, from Minute 30:50 to 35:22. Morrison said, "On questions of site access, currency, computers and inventories... we think we should all wait for the results" of the audit that has yet to begin.

            A March 1 memorandum from Mr. Swatantra Goolsarran of the UN Board of Auditors to Kemal Dervis and the heads of UNFPA, UNOPS and UNICEF said that the audit would begin on March 12. Tuesday Inner City Press asked Morrison to explain the new one-week delay. Morrison said to ask the auditors, then added that it is his understanding that they couldn't get all the auditors in place by March 12. The memorandum states that there are only three auditors: team leader Ms. Odette Anthoo of South Africa, Mr. Dioni Abalos of the Philippines and Ms. Martine Latare of France.

   Tellingly, Morrison had less than a week ago been quoted as to his "understanding was that the agency had never had problems with site visits." Tuesday Inner City Press asked about this quote and Morrison claimed he "did not say they never had problem." But any discussion of the lack of access, according to him, must wait until the completion of a still-not-begun audit.

Work-for-food project in N. Korea, UNDP not shown

            Separately, the World Food Program's New York spokeswoman has explained to Inner City Press why WFP was not included in Mr. Goolsarran's March 1 memo, nor in the Board of Auditor's audit:

Subj: Audit 

Date: 3/13/2007 10:10:36 AM Eastern Standard Time

From: Spokeswoman of WFP

 To: Inner City Press

Dear Matthew, here's more on the audit request:

WFP does not fall under the control of the Board of Auditors (historic reasons dating back to our time as part of FAO whose EB requests external audits).  Our external audits can only be requested by our Executive Board. WFP's Executive Board at its first regular session from 19-21 February, took the following decision:

"Noting the Secretary General's proposal, the Executive Board decided to request the WFP external auditor to carry out a special audit of the WFP operations in the Democratic Peoples Republic of Korea as a matter of priority and report its findings to the Board. The WFP external auditor might wish to consult and coordinate with the UN Board of Auditors which may be undertaking a special audit of United Nations organizations in the Democratic Peoples Republic of Korea, including the United Nations Funds and Programs that fall within its mandate."

Given this decision, it is now up to the WFP external auditor to set up its audit schedule. Hope this helps.

            It does, including by contract to UNDP. When UNDP's Morrison on Tuesday was asked to explain still not having provided information that he on Monday committed to produce, he again referred to waiting to the audit. Given that on Monday he said, we'll get back to you with that, what changed in the past 24 hours? Nothing, Morrison said. And in the hours after Tuesday's noon briefing, the status quo of non-response was maintained. Two separate controversies that Inner City Press asked about -- video here, from Minute 40:30 to 42:39 -- and on which Inner City Press submitted follow-up email reminders including to Kemal Dervis, Ad Melkert and others, were left entirely unaddressed by UNDP. Watch this site.

            After telling Inner City Press on Monday that he had no idea what UN Resident Representative Timo Pakkala is bringing from Pyongyang to New York on March 17, Tuesday Morrison acknowledged having said that Pakkala is bringing electronic records, "the highest priority documents."

            Within UNDP, there is speculation one of the two UN official with intimate knowledge of the program" quoted in the Chicago Tribune's article which called UNDP an "ATM" for Kim Jong Il may be Timo Pakkala, and that the May 2006 warning referred to by the Tribune was a communication from Pakkala to Kemal Dervis. Others ask, what could Pakkala gain by blowing the whistle?  Morrison on Tuesday referred repeatedly to staffers' "recourse" in UNDP, and to "whistle-blower" protections. But the stakes are high.

   UN and UNDP staff who have due to their employment G4 visas to be in the United States, would be required to leave the U.S. within thirty days of termination.  A simple reform that the U.S. Congress could enact, advance earlier by this publication and to be reported on from Washington DC later this week, would be to amend immigration rules to extend any whistleblower's right to remain in the U.S.. Developing.

On N. Korea, Ban Ki-moon Refers Press to UNDP, Which Refuses to Provide Promised Information

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, March 12 -- The UN Development Program on Monday flatly denied a Chicago Tribune story that it has paid envelopes of cash in North Korea, and that it has had an difficulty in visiting projects in the country, including those executed by the Kim Jong Il government.

   Speaking to reporters off-camera after the regularly scheduled (and televised) noon briefing, UNDP spokesman David Morrison complained that when he was interviewed by the Chicago Tribune, he was not asked about envelopes of cash nor about the 300 (or 298) phantom computers that ended up in the story. In response to questions from correspondents including Inner City Press, Morrison promised to verify and provide at least five pieces of information. Inner City Press twice verbally asked to be provide with the promised information, and committed the request to an email by 2 p.m. Monday. This request is set forth below. Eight hours later, UNDP had not provided any of the information to Inner City Press.

            During the noon briefing, as transcribed by the UN, Inner City Press asked:

Inner City Press: On the North Korea update you gave and on the audits, I’m definitely glad that we'll speak to Mr. Morrison afterwards.  But this is for you, as the Spokesperson for Ban Ki-moon.  Is the UN-administered staff, Timo Pakkala, the Resident Representative leaving; and, if so, who is going to be Ban Ki-moon's Representative in Pyongyang now that he leaves?  And, also on the audit, we've seen a memo from the Board of Auditors to four agencies -- UNDP, UNOPS, UNFPA and UNICEF... Has there been any response to Ban Ki-moon's 28 February letter?  

Spokesperson:  I think you should direct all those questions to UNDP.  We've already answered as much as we could.

Inner City Press: There are three other agencies.  That’s why I'm directing it to you.  I don't think he can answer for UNFPA or anybody.

Spokesperson:  Well, the process is continuing.  I told you that the other day.  It's starting with UNDP.  And it's going to continue for other agencies.

Inner City Press: But why is WFP not on the list, but UNICEF is?  Who do we ask that?  Obviously it's not UNDP.

Spokesperson:  I can find out for you from the Board of Auditors how they are going to proceed and what is going to be the next audit.

Inner City Press: Is Timo Pakkala leaving?  Who is the Resident Rep or Resident Coordinator?  Who is going to represent the UN?

Spokesperson:  This is a question to be answered by UNDP.

            UNDP's David Morrison did not answer who the next UN Resident Representative in North Korea will be. In fact, Mr. Morrison claimed not to know the name of the Deputy Resident Representative being left behind -- that would be Vineet Bhatia -- and, of the country officer whom Mr. Morrison said has been visiting North Korea four times a year, Morrison claimed not to know his last name, only his first: Napoleon (that would be Napoleon Navarro).

David Morrison: once upon a time

            One correspondent asked Morrison if he is in any position to authoritatively deny the Chicago Tribune's report. Morrison said that he is. Inner City Press asked if UNDP administered and handled the $10 million that the World Health Organization had responded that it received from South Korea for North Korea.

  "I don't know about WHO," Morrison answered. "I do know that there is no earmarked South Korean money that has gone to UNDP going back, I believe, ten years. There is no trust fund for North Korea that UNDP has been involved in." We'll see. Even in UNDP's most recently public audit, there is for example a "UNDP / Republic of Korea Trust Fund."  That is only one example.

            Morrison was asked, repeatedly, to provide a total figure of money UNDP has expended in North Korea, on its own behalf and for other UN agencies. He was asked, "Can we get the figure?" He answered, "Sure." Inner City Press asked Kemal Dervis for this figure on February 1, 2007, and never got it. Ad Melkert was asked for the figure in mid-February, and still not. On March 12, UNDP spokesman David Morrison promised the figure, and nine hours later had not provide it, nor any explanation.

            Morrison did say that the DPRK has not responded to UNDP's March 1 letter announcing the suspension of operations, and that UNDP has told the International Atomic Energy Agency to find another UN agency to make its payments in North Korea for now.  Morrison was asked if UNDP has any system to make sure its payments for other agency actually go for the stated purpose. Morrison said he would check and get back. Nine hours later, no answer had been provided. Morrison said he does not know how long UNDP's lease in North Korea runs for.

            While he is quoted in the Chicago Tribune that Timo Pakkala is bringing documents from Pyongyang to New York in electronic form, when Inner City Press on Monday asked him what documents Mr. Pakkala is bring, Morrison said, "I don't know."

            Unrelated to North Korea -- and Inner City Press has many such questions, but it seems pointless to ask them, when even promised information about North Korea is not provided -- Morrison was asked to describe UNDP's programs in Zimbabwe, and if they will be modified in light of last weekend's crackdown on all opposition by Robert Mugabe, and Ban Ki-moon's condemnation of the crackdown. Morrison answered to the first question, about current programs, "I can look into it." As to the second question, to which Inner City Press added the specific question if UNDP will  continue to push for a Mugage-sponsored human rights commission, Morrison said, "I don't know." But we've heard that before...

            Here are questions Inner City Press reiterated in writing to two UNDP spokespeople at 2 p.m. on Monday:

Subject: Re: DPR Korea - follow-up to "scrum," the various items, thanks in advance

From: Inner City Press
To: david.morrison [at]>, christina.lonigro [at]
Date: Mon, 12 Mar 2007 14:00:13

Hello --

   Following up after the post-noon briefing hallways scrum, I want to be sure to get the various things you said you'd look into and get back with:

--the overall figure / dollar volume that UNDP expended in / for North Korea, including on behalf of other UN agencies;

--whether in payments of other agencies, there has been anything other than purchase and bill accordingly;

--if UNDP has in place any system to check on the use of funds paid for others, any (by analogy) Know Your Customer system such as banks have;

--information on visits by UNDP headquarters staff to North Korea.

Also, would like to know when the Pyongyang lease expires, how much it costs and how and to whom it is paid. And please do keep informed regarding the new Resident Representative.

  There are other, non-North Korea questions, and even North Korea but non-scrum questions, but not in this email.

            There were and are even some "non-scrum" and non-North Korea questions. But none of the above had been answered by 10 p.m. Monday, eight hours after the questions were posed in writing. Developing.

UN Audit of Four of Its Agencies in N. Korea Starts, Memo Shows, Only in NY

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, March 12, updated 2:48 pm -- A memorandum from the UN's Board of Auditors to the UN Development Program and three other agencies, obtained by Inner City Press, reveals that a two-week audit to be conducted in New York begins today.

            The inter-office memo to UNDP Administrator Kemal Dervis and the heads of the other three New York-based agencies, the UN Children's Fund, the UN Population Fund and the UN Office of Program Services -- notably omitting the World Food Program, as well as the FAO and World Health Organization -- came from the Executive Secretary of the UN's Board of Auditors, Swatantra A. Goolsarran. It asked the officials to make available by March 12 "an inventory of financial, human resources and project records available both in New York and the Democratic People's Republic of North Korea [sic]... and access to correspondence files between UN personnel in DPRK and your New York headquarters."

            UNDP's documentation will only arrive in New York in a week's time, brought by the UN's outgoing Resident Representative in the North Korea, Timo Pakkala. An internal UNDP memo obtained by Inner City Press indicates that most of UNDP-North Korea's national staff will leave by March 15, while four will remain with the Deputy Resident Representative and Operations Manager to implement the suspension. UNDP will continue to lease its facilities during the suspension. One wonders: to whom will UNDP pay rent, and in what currency?

            UNDP insiders question whether Timo Pakkala, who they say has a UN and not UNDP contract, as the UN's Resident Representative in North Korea, is being fired. His contract, they say, runs out in July 2007, and this may be used to influence what he tells the auditors.  Mr. Pakkala flies to New York with the documents on March 17, to meet with the auditors on March 19. By then, only one week will remain in the two-week scoping audit, and several senior officials, including Kemal Dervis, will have been interviewed before the auditors have the relevant documents.

     Mr. Goolsarran's memo states that that focus for two weeks will be on the "identification of systems, expenditures and documentation, the quantification of amounts, the mapping of the relationships between UNDP, UNOPS, UNFPA and UNICEF at the Democratic People's Republic of Korea country level, and interviews with personnel."

            The memo names the auditors who will conduct the two-week review: team leader Ms. Odette Anthoo of South Africa, Mr. Dioni Abalos of the Philippines and Ms. Martine Latare of France. While the memo refers to "a possible site visit to DPRK," Mr. Pakkala's return to New York with all documents seems to indicate, at least to well-placed UNDP sources, that the Kim Jong Il government has not responded positively to UN Secretary-General Ban Ki-moon's February 28 letter requesting access for UN auditors.

            A New York-only audit, even with the documents being brought by Mr. Pakkala, would be far less than what Ban Ki-moon publicly called for, even as Mr. Ban amended and narrowed it. The goal of the called-for audit was to see where the money paid out actually went. This would require on site visits to North Korea, and cooperation by North Korean government officials, which does not appear to be forthcoming. One source questions, even if the auditor were allowed to enter North Korea during the 90 day period set by Ban Ki-moon, would they be required to hire North Korean helpers or minders? The same is asked of the UN International Atomic Energy Agency team arriving this week in Pyongyang.

UN auditors line up -- and then proceed without documents

            With Mr. Pakkala leaving the country, a question exists as to who then will be representing the UN system in North Korea. Sources question whether it will be someone from UNICEF, which is a part of this two week audit, or of WFP, FAO or WHO, which are not addressed by the Board of Auditor's memo. [It is not clear if a separate memos for audits in Rome and Geneva have gone out.] All four agencies have acknowledged, in responding to written questions from Inner City Press, that they paid hard currency to the North Korean government for staff selected by that government. The UN Population Fund, UNFPA, refused to answer Inner City Press' questions, but an internal audit subsequently obtained shows that UNFPA in North Korea has been paying in hard currency, through UNDP, click here for that story.

            At UNFPA, those addressed along with Executive Director Thoraya Obaid are Subash Gupta, Rahul Bhalla and head of audit Olivier Brasseur (who, as Inner City Press has reported, received a negative audit for his time with the UNFPA's Pakistan office).

            At UNOPS, where controversy about harassment and leadership change at the Dubai office continue, those addressed include only Executive Director Jan Mattsson and his deputy Vitaly Vanshelboim, as well as a joint UNOPS - UNDP auditor, Santiago Fua.

            At UNICEF, along with Ann Veneman (who told Inner City Press last week that her agency's operations will continue unchanged in North Korea), those addressed include outgoing deputy Rima Salah, Claus Andreasen and Comptroller Terry Brown.

            Within UNDP, the memo is also addressed to Associate Administrator Ad Melkert, Darshak Shah, Timo Pakkala (all of whom have declined to respond to previous questions from Inner City Press), as well as chief of staff Tegegenwork Gettu, Akiko Yuge, Antoine Khoury, David Lockwood and Jonathan Ng, "Implementation Advisor," along with the putative head of UNDP, Kemal Dervis.

            Mr. Dervis, slated to be interviewed this week, may continued be distracted. Reports in the Turkish press again indicate his political ambition to run for office, as well as reporting on a scandal involving his father, Riza Dervis, reputed to have offered Mercedes automobiles in exchange for contracts as a supplier of medical equipment to universities in the past. The apple, one source says, hasn't in this instance fallen far from the tree. To Inner City Press the relevance is that this familial scandal would make Mr. Dervis less likely to prevail.

[Update of March 12, 2:48 pm -- UNDP spokesman David Morrison, in another strange "scrum" with reporters in the hallways outside, rather than at the rostrum in, the UN's press briefing room, chided Inner City Press for calling this a "two week audit," despite the inclusion of Mr. Goolsarran's memo's reference to a subsequent, but not certain, site visit to the DPRK. So, for the record, the memo does call the two weeks starting today "the first phase of the audit." Will the Kim Jong Il government subsequently allow the auditors into the country? How long does UNDP's lease in Pyongyang run? Who will be the Resident Representative replacing Timo Pakkala? On these and other questions, Mr. Morrison said he did not know, and would get back with answers, which Inner City Press has requested orally and by email to receive, today, including the long-ago requested volume of money that UNDP expended in DPRK including for other UN agencies. Mr. Morrison said, we can get that number, the overall figure. We're waiting for it.]

            The memo is also copied to Alicia Barcena of the Department of Management, and Controller Warren Sach. Four weeks ago, Mr. Sach referred Inner City Press' questions to Mr. Goolsarran, who in turn declined to answer:

Subject: Re: Press questions on UNJSPF and audits / UNDP / North Korea

From: Warren Sach

To: Inner City Press

Sent: Mon, 12 Feb 2007 10:01 AM

  Dear Mr Lee, Thank you for your e-mail of earlier this morning which is hereby acknowledged. I did meet with UNDP's Resident Coordinator for North Korea, Timo Pakkala on Friday 9 Feb. I advised him to contact the Executive Secretary of the Board of Auditors, Mr Anand Goolsarran to coordinate on logistical arrangement for the forthcoming audit. Mr Goolsarran would also be the best person for you to contact re Board of Auditors matters. The ACABQ Chairman, Mr Rajat Saha has written on Friday 9th Feb requesting that a special audit be conducted by the BoA in N Korea. This followed my own formal request to ACABQ that the BoA be requested to undertake an audit; in connection with that request the ACABQ held separate hearings on Wed 7th Feb with both myself and the representatives of the BoA on the request for an audit. I do know if the BoA has yet begun the audit; I suspect they have a number of logistical steps to take before field work begins; Mr Goolsarran can best advise you.

            Inner City Press then posed the following still-outstanding questions to Mr. Goolsarran of the UN Board of Auditors:

Dear Mr. Goolsarran --

Hello... When will the audit(s) actually begin? We have heard a date of February 16. Is that correct? Who will perform the audit? ... Have you spoken with Mr. Pakkala? We are also informed that you met with the ACABQ on February 7. In the two meetings, what logistical arrangement were arrived at?

   Can you comment on the fact that the DPRK issues were not mentioned in the most recent publicly available audit of UNDP, which also refers, on Russia, to a document being "released" when it is nowhere available? Will the audit include other agencies such as WFP, UNFPA, WHO, FAO and others?  If limited to UNDP, will it include the money that UNDP pays on behalf of other agencies? Will any agencies be audited in geographies beyond the DPRK? If so, when?

There has been difficulty for the press in getting even basic information. UNDP, for example, has most recently told us regarding all North Korea-related questions, including a simple total figure of money UNDP handled for FAO, UNFPA and other UN agencies, that "Until the audit is completed, it would not be appropriate to comment on our work there..." In your position with the Board of Auditors, do you think it is  appropriate for a UN fund or program to cite the existence of one of your audits to, in the American  vernacular, expansively invoke the Fifth Amendment for at least 90 days on a wide range of issues of public concern?

            Mr. Goolsarran has yet to respond, although his memo, obtained by Inner City Press, answers some few of the questions. As previously reported, Controller Warren Sach left UN Headquarters on February 28, but is slated to be back today on March 12, the day the two-week audit process begins. Developing...

* * *

From  transcript of Feb. 20, 2007, UN noon briefing:

Inner City Press: Does the 90 days -- because he said it should be done in 90 days -- does the 90 days run from when he announced that the audits would begin or from when they actually began?

Spokesperson: Actually…

Question: Have they begun?

Spokesperson: Actually, I know that -- yes, they have started it.

Question: Which ones have started?

Spokesperson: The external auditors have started on the process.

Question: But could you specify? I mean, there’s a lot of agencies to be audited.

Spokesperson: As you know, they’re starting with the UNDP and the specific case of --

Question: You say they have started. You mean the one in North Korea?

Spokesperson: Yes.

Question: The clock is running?

Spokesperson: Yes.

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service.

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